Qatar enjoys stellar Q2 growth led by reinsurance unit
Qatar Insurance Company (QIC), the largest insurer in the MENA region, enjoyed robust growth in the second quarter of 2016 and a small increase in profits despite a number of headwinds it identified.
The company’s gross written premiums in the second quarter increased by 44 percent year on year to reach $1.5 billion while its net income increased by 3 percent to $169 million in the same period.
Reinsurance premiums, generated through global reinsurance subsidiary Qatar Re, grew at a rate of 41 percent to $654 million and accounted for 43 percent of the group’s total premium income. QIC’s Lloyd’s insurance platform Antares recorded growth of 16 percent to $233 million which is 15 percent of QIC’s total business.
Its combined ratio for the period, however, was 97 percent, three percentage points worse than the 94 percent it posted during the same period last year.
The company noted, in relation to its combined ratio, that the second quarter was characterised by a series of headline losses across the globe. Total insured losses in the second quarter of 2016 were more than 50 percent higher than the ten-year historical catastrophe loss average.
The company also stressed that these results and the growth in particular were despite the fact that global and regional market conditions remain “fragile”. It noted that even though oil prices have recovered from a 12 year low seen in February this year, they are still below the near-term fiscal break-even levels in most oil-exporting countries which, as a result, experience a protracted economic slowdown.
It said the GCC countries, including Qatar, are no exception. It also added: “Globally, a strong recovery of the US economy remains elusive and most Euro zone economies appear to be anemic whilst doubts about the prospects of the Chinese economy continue to weigh on sentiment.
“In addition, Britain’s decision to leave the European Union has sent additional shockwaves through global financial markets. Against this backdrop, a normalisation of global monetary policies has further receded into the distance.”
It said the growth it achieved in spite of these condition was because of its “strong diversification and innovation capabilities which, to some extent, allow QIC to brave the twin challenges of difficult global and regional economic and financial market conditions on the one hand and very soft global reinsurance and specialty insurance markets on the other.”
In the second quarter of 2016 QIC has successfully completed a rights issue, with shareholders’ equity increasing to $2.2 billion.
